Jio Financial Services lists on bourses today, shares hit 5% lower circuit: What happens next?

Jio Financial Services Limited (JFSL) – formerly known as Reliance Strategic Investments Limited, the demerged financial arm of Reliance Industries, made its stock market debut on August 21. The stock was listed at ₹265 per share on the BSE and ₹262 per share on the NSE against the discovered price of ₹ ₹261.85 apiece. However, the JFSL shares soon crashed 5 per cent to hit its lower price band of ₹251.75 on BSE. On the NSE, too, it hit its 5 per cent lower price band of ₹248.90.

As per the BSE, from Monday, August 21, 2023, JFSL shares are admitted to dealings on the exchange in the list of T group of securities. Jio Financial Services’ share price will be in the “Trade-for-Trade” segment for 10 trading days. Within this segment, intraday trading is not allowed means any trade either on the buy side or on the sell side, has to necessarily be for delivery only.

What next for Jio Financial Services?

Going forward, post-listing and three sessions later, the entity will be removed from the index. If it hits the price band in the first two days, its removal will be deferred by another three days, according to analysts.

‘’Any newly listed spun-off businesses will be initially included in a relevant index at a constant price, which is the difference between the demerged firm’s closing price the day before the ex-demerger date and the price during a special pre-open session on the ex-demerger date,” said Manish Chowdhury Head of Research, StoxBox

‘’Post-listing and three sessions later, this entity will be removed from the index. If it hits the price band in the first two days, its removal will be deferred by another three days,” added Chowdhury.

This means that after three days of being listed, the JFSL stock will be excluded from all indices at the price of its last trade. The delisting of JFSL shares from all indices will take place on the evening of Wednesday at the end of trading session on August 23.

‘’After that, JFSL shares will have the qualification to be added into the indices during the next cycle,” said Shrey Jain, Founder and CEO SAS Online.

Jio Financial Services share price ended at 5 per cent lower circuit after making a lacklustre debut on the stock exchanges. JFSL share price ended at ₹251.75 apiece on the BSE, compared to its listing price of ₹265 and its discovered price of ₹261.85 apiece. JFSL shares closed at ₹248.90 apiece on the NSE.

At closing, JFSL market capitalisation on BSE was ₹1,59,944 crore, while that on NSE was ₹1,58,133 crore. Meanwhile, Reliance Industries share price ended 1.44 per cent lower at ₹2,520 apiece on the BSE. Both Jio Financial Services and Reliance Industries emerged as top losers by the end of the trading session today on BSE and BSE.

JFSL’s valuation is based on expectations surrounding its future growth potential and its 6.1 per cent stake that it owns in Reliance Industries, according to analysts.

‘’The future growth prospects of JFSL are indeed bright since it can scale up its business hugely with its enormous connection with consumers and merchants. But institutional selling is a drag on the share price in the near-term. Since the stock is in the T segment institutional selling is dragging the price down,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Jio Financial Services was demerged from Reliance Industries (RIL) on July 20. Last year, while delivering its September quarter earnings, Reliance Industries announced the demerger of its financial services business and list it separately on the stock exchanges under Jio Financial Services Ltd. The Mumbai bench of the National Company Law Tribunal (NCLT) in its order on June 28 June (uploaded on the website of NCLT on July 5) approved the demerger.